Savings protection up to £50,000

Today your savings in banks covered by the UK Financial Services Compensation Scheme (FSCS) are guaranteed safe up to £50,000 per institution. Darling has refused to come out and guarantee all savings as some other european countries have. 

Although 98% of UK accounts are covered by the £50,000 guarantee, this only covers 60% of the value of total UK savings, reflecting the fact that 2% of accounts hold 40% of savings.

The Guardian, 7 October 2008

Clearly the majority of people in the UK now have all of their savings guaranteed.  It might be time to stop the panic unless your money is in a bank not covered by the FSCS.

Savings protection update

Just a quick word about things that were mentioned in the news recently:

1. The maximum protection under the Financial Services Compesation Scheme (FSCS) is still only £35,000.  There has been media coverage recently about raising it to £50,000 and this has in fact been scheduled to happen this year for some time.  The decision was made in the light of Northern Rock but the law has not yet been passed.

2. Around a third of Bradford & Bingley depositors had more than £35,000 on deposit and nobody lost a penny.

3. The Irish bank guarantee is telling – it covers only Irish banks.  And that doesn’t include banks who have a branch in Ireland, just those which are genuinely homegrown banks.  No taxpayers will want to prop up the banks of a foreign nation.  We are now in the realm of putting our money in banks based on their national origins and the willingness and financial ability of the government to intervene.